Chemical conglomerate LyondellBasell Industries (LYB -4.71%) wasn't offering the right kind of chemistry for investors as the trading week began. Those folks traded out of the storied company's shares on Monday on continued bearishness following a weak second-quarter earnings report. This was exacerbated by a set of price target cuts from analysts. A disappointing second quarter continued to reverberate. Ultimately, LyondellBasell's shares lost more than 4% of their value on a day when the S&P 500 index ros ...

Core Insights - LyondellBasell Industries reported Q2 2025 earnings with GAAP sales of $7.66 billion, exceeding Wall Street estimates, but non-GAAP earnings fell short of expectations with EPS at $0.62 compared to the $0.80 consensus [1][2][5] Financial Performance - Non-GAAP EPS was $0.62, down 71.8% year-over-year from $2.20, while GAAP EPS was $0.34, an 88.0% decline from $2.82 [2][6] - Revenue (GAAP) decreased by 11.8% year-over-year from $8.68 billion to $7.66 billion [2][6] - EBITDA (Non-GAAP) dropped 46.2% from $1.33 billion in Q2 2024 to $715 million [2][6] - The company incurred one-time charges totaling $87 million, impacting non-GAAP earnings [6] Business Overview and Strategy - LyondellBasell is a major producer of chemicals, plastics, and polymers, with operations primarily in North America and Europe [3] - The company is focusing on advancing its Circular & Low Carbon Solutions product line, reshaping its business portfolio, and improving operational efficiency [4][8] - The company is exiting the refining business to reduce carbon emissions exposure [7] Operational Highlights - The successful completion of maintenance at the Channelview complex increased polyethylene production, benefiting operating results [5] - The North America Olefins and Polyolefins business saw strong demand in packaging, construction, and healthcare, aided by lower U.S. natural gas prices [10] - Europe experienced modest margin recovery but remained a drag on overall profitability [10][11] Shareholder Returns - LyondellBasell returned $536 million to shareholders through dividends and share repurchases [9] - The company has maintained a regular quarterly dividend for 14 consecutive years [13] Future Outlook - Management expects some improvement in polyethylene margins in Q3 2025 due to stronger pricing and better utilization rates [14] - Operating rates are targeted at 85% for North America olefins and polyolefins, 75% for European assets, and 80% for Intermediates & Derivatives [14] - The outlook remains cautious due to uncertainties in global trade policies and ongoing margin pressures [15]

Part I – Financial Information [Item 1. Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents LyondellBasell Industries N.V.'s unaudited consolidated financial statements for the quarter ended June 30, 2025 [Consolidated Statements of Income](index=3&type=section&id=Consolidated%20Statements%20of%20Income) This section details the company's income statement, showing a significant decrease in net income for the three and six months ended June 30, 2025 Consolidated Statements of Income (Three Months Ended June 30) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | Change | | :--- | :--- | :--- | :--- | | Sales and other operating revenues | 7,658 | 8,678 | -11.8% | | Operating income | 285 | 999 | -71.5% | | Income from continuing operations | 155 | 946 | -83.6% | | Net income | 115 | 924 | -87.6% | | Diluted EPS (Continuing operations) | $0.47 | $2.88 | -83.7% | | Diluted EPS (Total) | $0.34 | $2.82 | -87.9% | Consolidated Statements of Income (Six Months Ended June 30) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | Change | | :--- | :--- | :--- | :--- | | Sales and other operating revenues | 15,335 | 16,982 | -9.7% | | Operating income | 399 | 1,650 | -75.8% | | Income from continuing operations | 178 | 1,379 | -87.1% | | Net income | 292 | 1,397 | -79.1% | | Diluted EPS (Continuing operations) | $0.53 | $4.20 | -87.4% | | Diluted EPS (Total) | $0.88 | $4.25 | -79.3% | - The company recorded a **$32 million** impairment charge in the three and six months ended June 30, 2025, with no corresponding charge in 2024[9](index=9&type=chunk) [Consolidated Statements of Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents the consolidated statements of comprehensive income, highlighting the impact of foreign currency translations on total comprehensive income Comprehensive Income Summary | Metric | Three Months Ended June 30, 2025 (Millions USD) | Three Months Ended June 30, 2024 (Millions USD) | Six Months Ended June 30, 2025 (Millions USD) | Six Months Ended June 30, 2024 (Millions USD) | | :--- | :--- | :--- | :--- | :--- | | Net income | 115 | 924 | 292 | 1,397 | | Total other comprehensive income (loss) | 94 | 9 | 179 | (47) | | Comprehensive income | 209 | 933 | 471 | 1,350 | - Foreign currency translations were a significant driver of other comprehensive income, contributing **$127 million** in Q2 2025, a reversal from a loss of **$44 million** in Q2 2024[11](index=11&type=chunk) [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity as of June 30, 2025 Key Balance Sheet Items | Metric | June 30, 2025 (Millions USD) | December 31, 2024 (Millions USD) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | 1,700 | 3,375 | | Total current assets | 11,076 | 12,266 | | Property, plant and equipment, net | 15,727 | 15,066 | | Total assets | 35,352 | 35,746 | | **Liabilities & Equity** | | | | Total current liabilities | 6,244 | 6,705 | | Long-term debt | 11,211 | 10,532 | | Total equity | 11,921 | 12,474 | - As of June 30, 2025, the company classified **$832 million** in assets and **$567 million** in liabilities as held for sale, which were not present at year-end 2024[14](index=14&type=chunk)[17](index=17&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the company's cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025 Cash Flow Summary (Six Months Ended June 30) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | (228) | 1,234 | | Net cash used in investing activities | (934) | (823) | | Net cash used in financing activities | (598) | (893) | | **Decrease in cash and cash equivalents** | **(1,684)** | **(541)** | - Operating cash flow turned negative in the first six months of 2025, a significant decrease from a positive flow of **$1.2 billion** in the same period of 2024, primarily due to lower net income and negative changes in working capital, particularly accounts payable[20](index=20&type=chunk) - The company increased spending on share repurchases to **$201 million** in H1 2025 from **$75 million** in H1 2024 and paid **$878 million** in dividends[23](index=23&type=chunk) [Consolidated Statements of Shareholders' Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity) This section details changes in shareholders' equity, including net income, dividends, and share repurchases for the six months ended June 30, 2025 Changes in Shareholders' Equity (Six Months Ended June 30, 2025) | Description | Amount (Millions USD) | | :--- | :--- | | Beginning Balance (Dec 31, 2024) | 12,462 | | Net income | 292 | | Other comprehensive income | 179 | | Dividends - common stock | (878) | | Repurchases of Company ordinary shares | (201) | | **Ending Balance (June 30, 2025)** | **11,909** | [Notes to the Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of the financial statements, including discontinued operations, asset sales, debt, and revenue disaggregation - In February 2025, the company ceased operations at its Houston refinery, and the refining business is now reported as a discontinued operation for all periods presented[35](index=35&type=chunk) - In June 2025, the company agreed to sell select European olefins & polyolefins assets, expecting a loss on sale of approximately **$700 million to $900 million** upon closing, with a non-cash impairment loss of **$32 million** recognized in Q2 2025[41](index=41&type=chunk)[43](index=43&type=chunk)[45](index=45&type=chunk) - In May 2025, a subsidiary issued **$500 million** of **6.150%** guaranteed notes due 2035, with proceeds intended for general corporate purposes, including repayment of 2025 notes[56](index=56&type=chunk) Revenue by Product (Six Months Ended June 30) | Product | 2025 (Millions USD) | 2024 (Millions USD) | | :--- | :--- | :--- | | Polyethylene | 3,660 | 3,840 | | Polypropylene | 3,103 | 3,075 | | Oxyfuels and related products | 2,282 | 2,541 | | Olefins and co-products | 1,999 | 2,562 | | Compounding and solutions | 1,817 | 1,903 | | Propylene oxide and derivatives | 1,144 | 1,232 | | Intermediate chemicals | 1,052 | 1,456 | | Other | 278 | 373 | | **Total** | **15,335** | **16,982** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the financial performance, condition, and future outlook, highlighting operational improvements and strategic capital allocation [Overview](index=33&type=section&id=Overview) This overview summarizes the company's financial performance, noting sequential improvements in Q2 2025 but a year-over-year decline in the first half - Q2 2025 results from continuing operations improved sequentially from Q1 2025, driven by higher operating rates in O&P-Americas and better margins in O&P-EAI, but were offset by a non-cash impairment on European assets held for sale[110](index=110&type=chunk) - First half 2025 results declined compared to the first half of 2024, primarily due to lower margins in the I&D and O&P-Americas segments, reduced Technology licensing, and the absence of a 2024 gain on the sale of the EO&D business[111](index=111&type=chunk) - The company used **$228 million** in cash from operations in H1 2025, invested **$1,022 million** in capital expenditures, and returned **$1,079 million** to shareholders via dividends and buybacks[113](index=113&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) This section analyzes the company's revenue, operating income, and tax rate, detailing the factors contributing to year-over-year declines - Revenues for H1 2025 decreased by **10%** YoY to **$15.3 billion**, driven by a **6%** decline in sales volumes and a **5%** drop in average sales prices[118](index=118&type=chunk) - Operating income for H1 2025 fell **76%** YoY to **$399 million**, with decreases across all segments, most notably in O&P-Americas (down **$648 million**) and I&D (down **$462 million**)[122](index=122&type=chunk) - The effective tax rate for H1 2025 was **37.1%**, up from **20.8%** in H1 2024, primarily due to the discrete tax recognition of foreign exchange gains and losses on lower pre-tax earnings[127](index=127&type=chunk) - Discontinued operations generated income of **$114 million** in H1 2025, largely due to a **$196 million** LIFO benefit from inventory liquidation at the closed Houston refinery in Q1 2025[128](index=128&type=chunk) [Segment Analysis](index=37&type=section&id=Segment%20Analysis) This section provides a detailed performance breakdown of the company's five operating segments, highlighting changes in EBITDA EBITDA by Segment (Six Months Ended June 30) | Segment | 2025 (Millions USD) | 2024 (Millions USD) | Change | | :--- | :--- | :--- | :--- | | O&P-Americas | 564 | 1,191 | -52.6% | | I&D | 380 | 1,106 | -65.6% | | Technology | 85 | 202 | -57.9% | | APS | 78 | 75 | +4.0% | | O&P-EAI | 19 | 84 | -77.4% | [Financial Condition](index=44&type=section&id=Financial%20Condition) This section examines the company's cash flow from operations, capital expenditures, and financing activities for the first half of 2025 - Cash used in operating activities was **$228 million** in H1 2025, a sharp reversal from **$1,234 million** provided in H1 2024, driven by lower earnings, deferred tax payments, and timing of accounts payable[175](index=175&type=chunk) - Capital expenditures totaled **$1,022 million** in H1 2025, up from **$967 million** in H1 2024, with approximately **70%** dedicated to sustaining maintenance[177](index=177&type=chunk) - Financing activities in H1 2025 included **$878 million** in dividend payments, **$201 million** in share repurchases, and the issuance of **$500 million** in new notes due 2035[179](index=179&type=chunk)[180](index=180&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) This section details the company's cash improvement plan, capital expenditure budget, and available liquidity as of June 30, 2025 - The company announced a Cash Improvement Plan targeting **$600 million** in annualized savings for 2025, comprising **$200 million** in capex deferrals, **$200 million** in working capital reduction, and **$200 million** in fixed cost reductions[185](index=185&type=chunk) - The 2025 capital expenditure budget is approximately **$1.7 billion**, with construction of the Flex-2 propylene expansion project being delayed to preserve capital[186](index=186&type=chunk) - As of June 30, 2025, the company had **$1.7 billion** in cash and cash equivalents and **$4.65 billion** in unused availability under its credit facilities[188](index=188&type=chunk)[189](index=189&type=chunk) [Current Business Outlook](index=46&type=section&id=Current%20Business%20Outlook) This section provides the company's expectations for Q3 2025, including anticipated margins and operating rates across key segments - For Q3 2025, the company expects improved North American integrated polyethylene margins, steady seasonal demand in Europe, and continued low oxyfuels margins[192](index=192&type=chunk) - Planned Q3 2025 operating rates are **85%** for O&P-Americas, **75%** for European O&P-EAI, and **80%** for I&D assets[193](index=193&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section confirms no material changes to the company's market risk exposure since the last annual report - There have been no material changes to the company's market risk exposure during the first six months of 2025[201](index=201&type=chunk) [Item 4. Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[203](index=203&type=chunk) - No material changes were made to the company's internal controls over financial reporting during the quarter[204](index=204&type=chunk) Part II – Other Information [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) This section discloses recent environmental legal matters, including lawsuits and proposed orders from regulatory bodies - In April 2025, the State of Texas sued a subsidiary, Equistar Chemicals, LP, for alleged violations of the Texas Clean Air Act between May 2018 and April 2021[208](index=208&type=chunk) - In May 2025, the Texas Commission on Environmental Quality issued a proposed order to resolve alleged air permitting exceedances at the La Porte Complex between 2020 and 2022[209](index=209&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) This section states that no material changes to the company's risk factors have occurred since the prior annual report - No material changes to the company's risk factors were identified since the last annual report[211](index=211&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase activities and a new authorization approved by shareholders Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 1 - April 30, 2025 | 1,552,339 | $58.09 | | May 1 - May 31, 2025 | — | $— | | June 1 - June 30, 2025 | — | $— | | **Total** | **1,552,339** | **$58.09** | - On May 23, 2025, shareholders approved a new share repurchase authorization for up to **34,042,250** shares, valid through November 23, 2026[213](index=213&type=chunk) [Item 4. Mine Safety Disclosures](index=52&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[214](index=214&type=chunk) [Item 5. Other Information](index=52&type=section&id=Item%205.%20Other%20Information) This section confirms that no Section 16 officers or directors adopted or terminated Rule 10b5-1 trading plans during Q2 2025 - No Section 16 officers or directors adopted or terminated a Rule 10b5-1 trading plan during Q2 2025[215](index=215&type=chunk) [Item 6. Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications and key agreements - Exhibits filed include officer certifications, details on the **6.150%** Guaranteed Notes due 2035, an amendment to the Receivables Purchase Agreement, and the Put Option Letter Agreement for the sale of European assets[216](index=216&type=chunk)

Financial Data and Key Metrics Changes - Earnings per share were reported at $0.62 with EBITDA of $715 million, showing sequential improvement due to less downtime and lower feedstock costs [18] - Cash returns to shareholders exceeded $500 million, with an increase in ordinary dividends and continued share repurchases [18][24] - The company is targeting approximately $200 million in reductions in working capital for 2025, alongside fixed cost reductions of $200 million [14][16] Business Line Data and Key Metrics Changes - The Olefins and Polyolefins Americas segment generated EBITDA of $318 million, a more than 25% improvement from the previous quarter, driven by higher integrated polyethylene margins [26] - The Intermediates and Derivatives segment reported EBITDA of $290 million, an increase of $79 million, primarily due to improved margins for styrene and propylene oxide [32] - The Advanced Polymer Solutions segment maintained EBITDA at $40 million, despite challenges in automotive markets [35] Market Data and Key Metrics Changes - North American polyethylene industry saw domestic sales volumes rebound to the highest levels since 2022, with a decline in producer inventories by three days of sales during the second quarter [27][40] - In Europe, lower naphtha and LPG feedstock costs improved margins, while capacity rationalizations helped balance supply and demand [29][41] - In Asia, near-term capacity additions continue to pressure regional supply and demand balances, but there is cautious optimism regarding China's stimulus programs [42] Company Strategy and Development Direction - The company is focusing on growing and upgrading core businesses, with a strategic emphasis on low-cost feedstocks in North America and the Middle East, while increasing access to circular and renewable feedstocks in Europe [9][10] - The planned sale of European assets is expected to enhance cash flow and reduce recurring capital expenditures [20][46] - The company is prioritizing sustaining capital investments to ensure operational reliability while deferring certain growth investments until market conditions improve [17][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current cycle and emphasized the importance of cash conversion and disciplined investments to secure dividends [56][59] - The company anticipates improved olefins margins and strong demand in the packaging business, driven by changing consumer behavior [78] - There is cautious optimism regarding the potential for price increases in polyethylene due to improved domestic demand and low global inventories [53][70] Other Important Information - The company is on track to achieve a run rate of $600 million in incremental cash flow for 2025, exceeding the previous target of $500 million [16][44] - The company is closely monitoring evolving tariffs and global trade flows, which could present both risks and opportunities [44] Q&A Session Summary Question: Sequential lift in O and P Americas due to downtime and price increases - Management expects an improvement of $85 million in Q3 due to less downtime and improved operating rates [49] Question: Safety of dividends amid cash flow challenges - The company confirmed the Q3 dividend of $1.37 per share, emphasizing strong liquidity and a focus on maintaining investment-grade ratings [56][58] Question: Clarification on 2026 CapEx forecast and precious metals opportunity - The 2026 CapEx forecast does not include the potential benefit from the European asset sale, and precious metal sales contributed $35 million in Q2 [62][67] Question: Cash flow generation expectations for 2025 - Management anticipates strong cash flow generation in the second half of the year, with a target of 80% cash conversion [72] Question: Third quarter dynamics in Intermediates and Derivatives segment - Expectations for the third quarter are relatively flat, with no material improvements anticipated [86] Question: Impact of China's new program on joint ventures - Management noted that restructuring in China's chemical industry is expected, but the company will focus on controllable factors [90] Question: Delay of Mooritech II project - The decision to delay was influenced by market dynamics and the need for prudent capital allocation [92][95] Question: Current state of pyrolysis market - Pyrolysis margins remain high due to demand exceeding supply, with positive regulatory momentum expected [98]

Financial Data and Key Metrics Changes - Earnings per share for Q2 2025 were $0.62, with EBITDA reported at $715 million, showing sequential improvement due to less downtime and lower feedstock costs [14][21] - Cash returns to shareholders exceeded $500 million, with an increase in ordinary dividends and continued share repurchases [14][20] - The company is targeting approximately $200 million in reductions in working capital for 2025, alongside fixed cost reductions of $200 million [11][12] Business Line Data and Key Metrics Changes - The Olefins and Polyolefins Americas segment generated EBITDA of $318 million, a more than 25% improvement from Q1, attributed to higher integrated polyethylene margins and less downtime [22] - The Intermediates and Derivatives segment reported EBITDA of $290 million, an increase of $79 million, driven by improved margins for styrene and propylene oxide [27] - The Advanced Polymer Solutions segment maintained EBITDA at $40 million, despite challenges in automotive markets and a slight decline in volumes [30] Market Data and Key Metrics Changes - North American polyethylene industry saw domestic sales rebound to the highest volumes since 2022, with producer inventories declining by three days of sales during Q2 [23][35] - In Europe, lower naphtha and LPG feedstock costs improved margins, while capacity rationalizations are enhancing supply-demand balances [25][36] - In Asia, near-term capacity additions are pressuring regional supply-demand balances, but there is cautious optimism regarding China's stimulus programs [36] Company Strategy and Development Direction - The company is focusing on growing and upgrading core businesses, with a strategic emphasis on low-cost feedstocks in North America and the Middle East, and increasing access to circular and renewable feedstocks in Europe [6][8] - The planned sale of European assets is expected to reduce recurring CapEx and other costs, aligning with the strategy to optimize the portfolio [41] - The company is delaying selected growth investments until market conditions improve, preserving options for profitable growth [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current cycle, emphasizing a disciplined approach to capital allocation and cash management [55][39] - The company anticipates improved cash flow generation in the second half of 2025, with a target of achieving 80% cash conversion for the full year [68] - There is cautious optimism regarding potential price increases in polyethylene due to improved domestic demand and low global inventories [48][72] Other Important Information - The company is on track to achieve a run rate of $600 million in incremental cash flow for 2025, exceeding the original target of $500 million [12][38] - The construction of the Muretic One chemical recycling plant in Germany is progressing well, aimed at meeting the demand for circular plastics [9][17] - The company is closely monitoring evolving tariffs and global trade flows, evaluating risks and opportunities presented by these dynamics [38] Q&A Session Summary Question: Sequential lift in O and P Americas and potential price increases - Management expects an $85 million improvement in Q3 due to less downtime and improved olefins margins, with potential for price increases if tariff uncertainties are resolved [44][45][48] Question: Safety of dividends amid cash flow challenges - The company confirmed the Q3 dividend of $1.37 per share, emphasizing strong liquidity and a commitment to maintaining dividends while managing cash flow [51][54] Question: Clarification on 2026 CapEx forecast - The 2026 CapEx forecast of $1.4 billion does not include the potential benefit from the European asset sale, which will be realized post-transaction [57][60] Question: Expectations for cash flow generation in 2025 - Management anticipates improved cash flow generation in the second half of 2025, with a target of $3 billion in EBITDA, driven by disciplined working capital management [64][68] Question: Dynamics in the Intermediates and Derivatives segment - The segment is expected to remain relatively flat in Q3, with no material improvements anticipated due to market conditions and scheduled turnarounds [78][82]

Financial Performance & Strategy - The company's Cash Improvement Plan is on track to achieve $600 million of incremental cash flow for 2025[24, 31, 36, 71] - The company is targeting $200 million in trade working capital reductions and $200 million in fixed cost reductions by the end of 2025[24] - 2025 CAPEX guidance revised down $200 million from $1.9 billion to $1.7 billion, and 2026 CAPEX is expected to be $1.4 billion[24] - The company returned over $500 million to shareholders through dividends and share repurchases during 2Q25[26, 36] - The company has $1.7 billion in cash and cash equivalents as part of $6.4 billion of available liquidity as of June 30, 2025[36] Portfolio Optimization - The company announced the planned sale of four European O&P assets[10, 13, 36, 51, 52, 71] - Portfolio optimization improves the company's cost advantage, positioning it well to serve markets from its cost-advantaged asset base in North America and the Middle East[14] - The company is rebalancing its global footprint toward cost-advantaged regions[71] Market Dynamics & Outlook - US/Canada domestic polyethylene sales grew 3.5% vs 1Q25[49] - The company is targeting approximately 85% operating rates in 3Q25 for O&P Americas and approximately 75% for O&P EAI[49, 52] - The company's 2Q25 last twelve months (LTM) cash conversion was 75%[40]

Core Insights - LyondellBasell Industries N.V. (LYB) reported a significant decline in profit for Q2 2025, with earnings of $115 million or 34 cents per share, down 87.5% from $924 million or $2.82 per share a year ago [1] - Adjusted earnings were 62 cents, reflecting a 71.8% decrease from the previous year's figure of $2.20, and missed the Zacks Consensus Estimate of 87 cents [1][9] - Despite a drop in revenue across all segments, net sales of $7,658 million exceeded the Zacks Consensus Estimate of $7,405.6 million, but fell 11.7% from $8,678 million in the prior-year quarter [2] Segment Performance - The Olefins & Polyolefins — Americas segment saw revenues decline by 18.8% to $2,377 million, missing the consensus estimate of $2,731.5 million [3] - Olefins & Polyolefins — Europe, Asia, and international segment revenues decreased by 4.8% year over year to $2,704 million, surpassing the consensus estimate of $2,600 million [3] - In the Intermediates and Derivatives segment, sales were $2,275 million, down 18.6% year over year, missing the consensus estimate of $2,321.5 million [4] - Advanced Polymer Solutions revenues fell by 3.3% year over year to $917 million, also missing the consensus estimate of $926 million [4] - The Technology segment's revenues decreased by 13.8% to $137 million, lagging behind the consensus estimate of $145 million [4] Financial Overview - LYB generated $351 million in cash from operating activities during the quarter, with capital spending of $539 million and $536 million distributed to shareholders through dividends and share buybacks [5] - At the end of the quarter, LYB had $1.7 billion in cash and cash equivalents, along with $6.4 billion in total available liquidity [5] Future Outlook - For Q3, LyondellBasell expects improved North American integrated polyethylene margins due to completed maintenance and strong domestic demand, while European demand and favorable feedstock costs are anticipated to persist [6] - The company plans to operate its North American olefins and polyolefins assets at 85% capacity, European facilities at 75%, and Intermediates & Derivatives assets at 80% [7] - LYB is monitoring potential risks and opportunities related to shifting tariffs and global trade patterns [7] Stock Performance - Shares of LyondellBasell have decreased by 41% over the past year, compared to a 26.6% decline in the industry [10]

Group 1 - LyondellBasell reported $7.66 billion in revenue for Q2 2025, a year-over-year decline of 27.5% and an EPS of $0.62 compared to $2.24 a year ago [1] - The reported revenue exceeded the Zacks Consensus Estimate of $7.41 billion by 3.41%, while the EPS fell short of the consensus estimate of $0.87 by 28.74% [1] - The company's stock has returned -6.6% over the past month, underperforming the Zacks S&P 500 composite's +2.3% change, and currently holds a Zacks Rank 5 (Strong Sell) [3] Group 2 - Key EBITDA metrics for LyondellBasell include: - Technology: $33 million vs. $67.58 million estimated - Advanced Polymer Solutions: $32 million vs. $31.88 million estimated - Intermediates & Derivatives: $286 million vs. $253.36 million estimated - Olefins & Polyolefins- Americas: $313 million vs. $323.25 million estimated - Olefins & Polyolefins- Europe, Asia, International: $2 million vs. $45.75 million estimated - Other: $-13 million vs. $-5 million estimated [4]

分组1 - LyondellBasell reported quarterly earnings of $0.62 per share, missing the Zacks Consensus Estimate of $0.87 per share, and down from $2.24 per share a year ago, representing an earnings surprise of -28.74% [1] - The company posted revenues of $7.66 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 3.41%, but down from $10.56 billion year-over-year [2] - LyondellBasell shares have declined approximately 22% since the beginning of the year, contrasting with the S&P 500's gain of 7.8% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $1.16 on revenues of $7.34 billion, and for the current fiscal year, it is $3.50 on revenues of $29.79 billion [7] - The Zacks Industry Rank for Chemical - Diversified is currently in the bottom 5% of over 250 Zacks industries, indicating a challenging environment for the sector [8] - The estimate revisions trend for LyondellBasell was unfavorable ahead of the earnings release, resulting in a Zacks Rank 5 (Strong Sell) for the stock [6]

[Q2 2025 Earnings Overview](index=1&type=section&id=Q2%202025%20Earnings%20Overview) LyondellBasell reported Q2 2025 net income of $115 million and EBITDA of $606 million, with $351 million cash from operations and $536 million returned to shareholders [1.1 Key Financial Highlights](index=1&type=section&id=1.1%20Key%20Financial%20Highlights) The company reported Q2 2025 net income of $115 million and EBITDA of $606 million, alongside significant cash generation and shareholder returns **Q2 2025 Earnings Summary (Millions of U.S. dollars, except share data):** | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Sales and other operating revenues | $7,658 | $7,677 | $8,678 | | Net income | $115 | $177 | $924 | | Diluted earnings per share | $0.34 | $0.54 | $2.82 | | Net income excluding identified items | $202 | $110 | $724 | | Diluted earnings per share excluding identified items | $0.62 | $0.33 | $2.20 | | EBITDA | $606 | $655 | $1,643 | | EBITDA excluding identified items | $715 | $576 | $1,330 | - Cash from operating activities: **$351 million**[4](index=4&type=chunk) - Returned **$536 million** to shareholders through dividends and share repurchases[4](index=4&type=chunk) [1.2 CEO's Perspective](index=2&type=section&id=1.2%20CEO's%20Perspective) CEO Peter Vanacker emphasized strategic progress, disciplined capital allocation, and an expanded Cash Improvement Plan, expressing cautious optimism for polyolefins and policy developments - Advancing a three-pillar strategy with disciplined capital allocation to extend competitive advantage[5](index=5&type=chunk) - Expanding the Cash Improvement Plan to navigate a prolonged cyclical downturn[5](index=5&type=chunk) - Encouraged by recent improvements in pricing and demand for polyolefins, and cautiously optimistic about policy developments addressing excess capacity in China and revitalizing the European chemical industry[5](index=5&type=chunk) [Detailed Second Quarter 2025 Performance](index=2&type=section&id=Detailed%20Second%20Quarter%202025%20Performance) This section provides a detailed analysis of LyondellBasell's Q2 2025 financial results, operational performance by segment, and cash flow activities [2.1 Consolidated Financial Results](index=2&type=section&id=2.1%20Consolidated%20Financial%20Results) Q2 2025 consolidated financial results were significantly impacted by $87 million in identified items, reducing diluted EPS by $0.28 - Identified items of **$87 million**, net of tax, impacted Q2 2025 earnings by **$0.28 per diluted share**[6](index=6&type=chunk) - Identified items related to asset write-downs, transaction costs, Cash Improvement Plan, and discontinued operations[6](index=6&type=chunk) [2.1.1 Net Income and EPS](index=2&type=section&id=2.1.1%20Net%20Income%20and%20EPS) Q2 2025 net income was $115 million ($0.34 diluted EPS), increasing to $202 million ($0.62 diluted EPS) excluding identified items **Q2 2025 Net Income and Diluted EPS (Millions of U.S. dollars, except share data):** | Metric | Q2 2025 | | :--- | :--- | | Net income | $115 | | Diluted earnings per share | $0.34 | | Net income excluding identified items | $202 | | Diluted earnings per share excluding identified items | $0.62 | [2.1.2 EBITDA](index=2&type=section&id=2.1.2%20EBITDA) Q2 2025 EBITDA was $606 million, rising to $715 million when excluding identified items **Q2 2025 EBITDA (Millions of U.S. dollars):** | Metric | Q2 2025 | | :--- | :--- | | EBITDA | $606 | | EBITDA excluding identified items | $715 | [2.2 Operational Performance by Segment](index=2&type=section&id=2.2%20Operational%20Performance%20by%20Segment) Operational performance improved in North America and Europe due to demand and cost factors, while Intermediate Chemicals saw mixed results [2.2.1 North America O&P](index=2&type=section&id=2.2.1%20North%20America%20O%26P) North American O&P experienced improved polyethylene volumes and margins from successful turnarounds and stronger seasonal demand, with Q3 profitability expected to benefit from price increases - Successful completion of turnarounds at Channelview complex led to higher operating rates and sequential improvement in integrated polyethylene volumes and margins[7](index=7&type=chunk) - Domestic demand for polyethylene and polypropylene was seasonally stronger, supported by consumer packaging, healthcare, building & construction, and infrastructure markets[7](index=7&type=chunk) - June increase in polyethylene contract prices provides momentum for third quarter profitability[7](index=7&type=chunk) [2.2.2 Europe O&P](index=2&type=section&id=2.2.2%20Europe%20O%26P) Europe O&P saw improved integrated polyethylene margins due to lower feedstock costs and increased seasonal polyolefins demand - Lower feedstock costs helped improve integrated polyethylene margins[7](index=7&type=chunk) - Polyolefins volumes benefited from increased seasonal demand[7](index=7&type=chunk) [2.2.3 Intermediate Chemicals](index=2&type=section&id=2.2.3%20Intermediate%20Chemicals) Intermediate Chemicals profitability improved from stronger styrene margins but saw a decline in oxyfuels margins due to lower crude oil prices - Intermediate Chemicals profitability improved with stronger styrene margins due to lower benzene costs and price support from industry outages[8](index=8&type=chunk) - Oxyfuels margins fell as lower crude oil prices limited typical seasonal uplift[8](index=8&type=chunk) [2.3 Cash Flow, Capital Allocation, and Liquidity](index=2&type=section&id=2.3%20Cash%20Flow,%20Capital%20Allocation,%20and%20Liquidity) LyondellBasell generated $351 million in operating cash flow, invested $539 million in capital expenditures, returned $536 million to shareholders, and maintained $6.4 billion in liquidity **Q2 2025 Cash Flow and Capital Allocation (Millions of U.S. dollars):** | Metric | Q2 2025 | | :--- | :--- | | Cash from operating activities | $351 | | Capital expenditures | $539 | | Returned to shareholders (dividends & share repurchases) | $536 | - Maintained **$1.7 billion** in cash and cash equivalents and **$6.4 billion** in available liquidity at quarter-end[9](index=9&type=chunk) [Strategic Direction and Future Outlook](index=2&type=section&id=Strategic%20Direction%20and%20Future%20Outlook) This section outlines LyondellBasell's strategic initiatives, including asset optimization and capital preservation, and provides the outlook for Q3 2025 market conditions and operating rates [3.1 Strategic Highlights](index=2&type=section&id=3.1%20Strategic%20Highlights) LyondellBasell advanced its three-pillar strategy through asset optimization, capital preservation, and an expanded Cash Improvement Plan targeting $1.1 billion in improvements - Planned sale of four European assets to reposition for global markets from a more cost-advantaged asset base[10](index=10&type=chunk) - Delaying construction of the Flex-2 project to align investment levels with cash generation and preserve capital[10](index=10&type=chunk) - Expanded Cash Improvement Plan targeting at least **$1.1 billion** in cash improvements over 2025 and 2026[10](index=10&type=chunk) [3.2 Third Quarter 2025 Outlook](index=3&type=section&id=3.2%20Third%20Quarter%202025%20Outlook) Q3 2025 outlook anticipates improved North American polyethylene margins, steady European demand, favorable feedstock costs, and continued low oxyfuels margins [3.2.1 Market and Margin Expectations](index=3&type=section&id=3.2.1%20Market%20and%20Margin%20Expectations) Q3 market expectations include improved North American polyethylene margins, steady European demand with favorable feedstock costs, and persistently low oxyfuels margins - North American integrated polyethylene margins expected to improve due to completed maintenance and increased prices supported by solid domestic demand and stronger export volumes[11](index=11&type=chunk) - Europe expects steady seasonal demand and favorable feedstock costs, with ongoing capacity rationalizations aiding regional supply and demand balance[11](index=11&type=chunk) - Oxyfuels margins are expected to remain low for the remainder of the summer season[11](index=11&type=chunk) [3.2.2 Operating Rate Guidance](index=3&type=section&id=3.2.2%20Operating%20Rate%20Guidance) LyondellBasell provides Q3 2025 operating rate guidance of 85% for North American O&P, 75% for European O&P, and 80% for I&D assets **Q3 2025 Operating Rate Guidance:** | Segment | Expected Operating Rate | | :--- | :--- | | North American O&P assets | 85% | | European O&P assets | 75% | | Intermediates & Derivatives (I&D) assets | 80% | [Supplemental Information](index=3&type=section&id=Supplemental%20Information) This section provides additional context, including conference call details, company overview, forward-looking statement disclaimers, non-GAAP financial measure definitions, and detailed financial reconciliations [4.1 Conference Call Information](index=3&type=section&id=4.1%20Conference%20Call%20Information) LyondellBasell will host a conference call on August 1 at 11 a.m. ET to discuss Q2 2025 results, with access details and replay information provided - Conference call to be held on August 1 at 11 a.m. ET, featuring CEO Peter Vanacker and other executives[13](index=13&type=chunk) - Access via toll-free dial-in (1-877-407-8029), international dial-in (201-689-8029), or webcast at investors.lyondellbasell.com/earnings[13](index=13&type=chunk) - Replay available from August 1 to September 1, 2025, via dial-in (1-877-660-6853 or 201-612-7415, Access ID: 13746206)[13](index=13&type=chunk) [4.2 About LyondellBasell](index=3&type=section&id=4.2%20About%20LyondellBasell) LyondellBasell is a global chemical industry leader focused on sustainable living, enabling a circular economy, and is a major producer of polymers and polyolefin technologies - A leader in the global chemical industry, creating solutions for everyday sustainable living[14](index=14&type=chunk) - Enabling a circular and low carbon economy through advanced technology and focused investments[14](index=14&type=chunk) - One of the world's largest producers of polymers and a leader in polyolefin technologies, developing high-quality products for applications from sustainable transportation to healthcare[14](index=14&type=chunk) [4.3 Forward-Looking Statements](index=4&type=section&id=4.3%20Forward-Looking%20Statements) This section clarifies that the release contains forward-looking statements subject to significant risks and uncertainties, with no obligation for the company to update them - Statements not historical facts are forward-looking, based on management's reasonable assumptions but subject to significant risks and uncertainties[15](index=15&type=chunk) - Actual results could differ materially due to factors such as market conditions, business cyclicality, raw material volatility, competitive pressures, operating interruptions, and regulatory actions[15](index=15&type=chunk) - The company does not assume any obligation to update forward-looking statements, except as required by law[15](index=15&type=chunk) [4.4 Information Related to Non-GAAP Financial Measures](index=4&type=section&id=4.4%20Information%20Related%20to%20Non-GAAP%20Financial%20Measures) This section defines and explains the company's use of non-GAAP financial measures like EBITDA and adjusted figures, provided as supplemental information for understanding business trends - Non-GAAP measures (EBITDA, adjusted net income/EPS) provide useful supplemental information for understanding underlying business trends and performance, and for period-over-period comparisons[19](index=19&type=chunk) - EBITDA is calculated as net income (loss) plus interest expense (net), provision for (benefit from) income taxes, and depreciation and amortization[20](index=20&type=chunk) - Identified items include adjustments for lower of cost or market (LCM), gain on sale of business, asset write-downs, Cash Improvement Plan costs, Dutch PO joint venture exit costs, European transaction costs, and discontinued operations[3](index=3&type=chunk)[20](index=20&type=chunk) [4.5 Financial Reconciliations and Tables](index=7&type=section&id=4.5%20Financial%20Reconciliations%20and%20Tables) This section provides detailed reconciliations of GAAP to non-GAAP financial measures, including net income, EBITDA, diluted EPS, and calculations for cash, liquidity, and shareholder returns [4.5.1 Net Income and EBITDA Reconciliations](index=7&type=section&id=4.5.1%20Net%20Income%20and%20EBITDA%20Reconciliations) Table 2 reconciles net income to net income excluding identified items, and to EBITDA, for Q2 and YTD 2025 and 2024, with footnotes explaining identified items **Table 2 - Reconciliations of Net Income to Net Income Excluding Identified Items and to EBITDA (Millions of U.S. dollars):** | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net income | $115 | $177 | $924 | $292 | $1,397 | | Net income excluding identified items | $202 | $110 | $724 | $312 | $1,157 | | EBITDA | $606 | $655 | $1,643 | $1,261 | $2,689 | | EBITDA excluding identified items | $715 | $576 | $1,330 | $1,291 | $2,293 | - Identified items include gain on sale of business, asset write-downs, Cash Improvement Plan costs, Dutch PO joint venture exit costs, European transaction costs, and loss (income) from discontinued operations[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) [4.5.2 Diluted EPS Reconciliations](index=8&type=section&id=4.5.2%20Diluted%20EPS%20Reconciliations) Table 3 reconciles diluted EPS to diluted EPS excluding identified items for Q2 and YTD 2025 and 2024 **Table 3 - Reconciliation of Diluted EPS to Diluted EPS Excluding Identified Items:** | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Diluted earnings per share | $0.34 | $0.54 | $2.82 | $0.88 | $4.25 | | Diluted earnings per share excluding identified items | $0.62 | $0.33 | $2.20 | $0.95 | $3.52 | [4.5.3 Cash, Liquid Investments, and Total Liquidity](index=8&type=section&id=4.5.3%20Cash,%20Liquid%20Investments,%20and%20Total%20Liquidity) Table 4 details cash, liquid investments, and total liquidity as of June 30, 2025, showing $1.704 billion in cash and $6.354 billion in total liquidity **Table 4 - Calculation of Cash and Liquid Investments and Total Liquidity (Millions of U.S. dollars, as of June 30, 2025):** | Metric | Amount | | :--- | :--- | | Cash and cash equivalents and restricted cash | $1,704 | | Cash and liquid investments | $1,704 | | Availability under Senior Revolving Credit Facility | $3,750 | | Availability under U.S. Receivables Facility | $900 | | Total liquidity | $6,354 | [4.5.4 Dividends and Share Repurchases](index=8&type=section&id=4.5.4%20Dividends%20and%20Share%20Repurchases) Table 5 breaks down the $536 million returned to shareholders in Q2 2025, comprising $445 million in dividends and $91 million in share repurchases **Table 5 - Calculation of Dividends and Share Repurchases (Millions of U.S. dollars, Three Months Ended June 30, 2025):** | Metric | Amount | | :--- | :--- | | Dividends paid - common stock | $445 | | Repurchase of Company ordinary shares | $91 | | Dividends and share repurchases | $536 |